Medicare for overseas retirees

As I mentioned in an earlier post about Social security for overseas retirees, US citizens who retire abroad are fully eligible for receiving Social security payments. The situation with Medicare, however, is quite different.

Just as in the case of Social security, the rules regarding Medicare eligibility and benefits are subject to change in the coming years. It is important to understand the current regulations, however.

First, some basics about Medicare:

  • Medicare is a Federal health insurance program for those people who are 65+ years of age, or have certain disabilities. You qualify for Medicare if you are 65 years of age and if you are eligible for Social Security retirement benefits.
  • Even if you opt for Social security payments later than age 65, you are still eligible for Medicare at 65. If you opt for early Social security benefits before the age of 65, you will not be eligible for Medicare benefits until you are 65.
  • To be eligible for Medicare, you must be a legal US resident. You do not have to be a US citizen.
  • Medicare comes in three parts:
    • Part A (Hospital Insurance) covers hospital stays.
    • Part B (Medical Insurance) covers doctor bills and outpatient care.
    • Part D (Prescription Drug Coverage) covers prescription drugs
  • Part A is free (i.e. you do not pay any premiums) if you have made at least 10 years of Medicare contributions during your working years.
  • Parts B and D are not free; the amount you pay for these depends on your income at the time, and the level of benefits you choose. It does not depend on how many years you have worked (assuming a minimum of 10). Nor does it depend on your assets.
  • You must enroll for Medicare coverage when you are eligible, i.e., at 65. If you decline Medicare during the initial enrollment period, your premiums for Part B may be increased by 10% for every 12 month period that you did not have Part B. If you have coverage through an employer, you may be eligible for delaying Medicare enrollment. There's a similar rule for Part D as well.
  • To stay enrolled in Medicare you need to continue making premium payments for Part B ($93.50 monthly for 2007, for most people). Normally, Medicare premiums are deducted from your social security payments.
  • In addition to Medicare, many retirees sign up for Medigap supplemental insurance. This is health insurance sold by private insurance companies to fill the “gaps” in Medicare Plan coverage.

Here are some specifics about Medicare for those who plan to live or travel outside the US:

  • Medicare benefits are available only if you live in the US. If you currently have Medicare and you move outside the US, medical expenses outside the US will not be covered by Medicare.
  • If and when you return to the US, Medicare Part A will be available to you. For Part B coverage, you have the option to continue paying your monthly premium while living outside the US. Since Medicare benefits are only available inside the US, it is strange to have to continue to pay a monthly premium for a service not available to you.
  • If you drop your Part B coverage, then return to the US, you will be required to re-enroll and pay a premium that is 10% higher for each 12-month period that you did not have coverage. This is just as if you had declined coverage when it was first available to you.
  • If you are re-enrolling for Part B, you may only do so from January through March each year. Coverage will not resume until July of that year.

So what other options are available for overseas retirees besides Medicare?

  • The Social Security Administration recommends that those on Medicare who wish to travel abroad consider getting short-term coverage designed for travelers. There are several companies that provide such coverage, but most companies will not cover pre-existing medical conditions. Such coverage will only help for short trips abroad, not for retirees.
  • For those who travel outside the US frequently, Medigap (Medicare Supplement) provides foreign coverage, with no extra cost for eligible treatments. These are reimbursement plans, so you have to pay the bill first and then submit it for compensation. They only cover the first 60 days you're outside the US. These plans usually also have a dollar cap per trip.
  • This leaves long-term retirees overseas with only three options: buy private coverage individually or through a group, pay into the government-sponsored system or buy a private policy in the country where you live, or go without coverage.
After years of paying Medicare taxes (1.45% of the paycheck for most workers), overseas retirees gain nothing from Medicare. Not surprisingly, the lack of access to Medicare is a hot-button issue for retirees abroad.

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16 comments:

Anonymous said...

US citizens living abroad and paying the part B premium can come back to the US for treatment whenever they want, even if only for the duration of the treatment. Does the same apply to foreigners who acquired Social Security and Medicare rights during a period of employment in the US? In other words, could a former resident pay the premiums and always have US Medicare as a backup option for treatment on a visit?

Nigel said...

To be eligible to enroll in Medicare at 65 you have to be "a U.S. citizen or a legal US resident for at least 5 years", so I think non-citizen who lives outside the US will not qualify.
If you are a non-citizen enrolled in Medicare and you then leave the US, it is not clear how it will be handled. It seems likely that you will be able to stay enrolled as long as you continue to pay the premium.

Anonymous said...

so does mean if I am a united states citizen residing in Canada but need faster treatmentthan is avilable here or just prefer to see a specialist or something like that , I could cross the border and use my medicare there? I am having so much trouble finding an anzwer to that situation .

Nigel said...

Anon,
Yes, assuming that you are eligible for Medicare (65+ and have the required years of work experience in the US) and that you pay your Medicare Part B premiums. Also note that there are numerous gaps in Medicare coverage, so this may not cover all your expenses.

If you are eligible to participate in the Canadian health care system, I am not sure if this is an attractive option.

Anonymous said...

Dear Mr. Nigel
thank you for your description, lot help me, although I need some information how to choose the best medicaregaps provider. My hucband plan to retire at Asia and wonder if maybe some country in Asia have cooperation with medicare program?
Thank you so much.

diacat said...

Regarding Nigel's answer about crossing the border and using medicare in U.S. I would like to know if there are stipulations about what state I would be able to use it? I live in the eastern part of canada and was from Nevada. I am a U.S. citizen.

Rolando Reyes said...

After inquiring about this, Medicare can be applied in any hospitals within the US and US territories. If you happen to be living outside the US, you can go back to the US and have your treatment there. In my case, I am planning to retire in the Philippines and plan to pay the portion for Medicare Part B. If in case I need it, I will have to fly Guam and have my treatment there and as I have been told I can cover it under my Medicare benefits.

Anonymous said...

Can an overseas retiree who is eligible for Medicare purchase medical supplies, such as diabetic supplies, through one of the mail order diabetic supplies compaies that offer to bill Medicare if they are delivere dto a family member in the United States?

Anonymous said...

Everyone should contact their congressional representative and our two senators and demand that retirees in foreign countries are covered in some form by Medicare. We paid for that insurance plan and we should be able to enjoy for what we paid. Veterans can receive medical benefits abroad by a plan called Tricare and even there is a Veterans Hospital in the Phillipines.

Anonymous said...

You are giving out erroneous information. It is NOT true that a US citizen living abroad is not ELIGIBLE for medicare. What is true is that you cannot USE your medicare coverage in hospitals outside the USA (with very limited exceptions in certain areas that do not apply to most expats). Many expats who live outside the USA return to the USA when they need to use medicare for a serious illness and they are entitled to do this.

Nigel said...

Anon,
Please re-read the article. Nowhere does it say that US citizens living abroad are not eligible for Medicare.

Anonymous said...

I have been in the Philippines for the past year 2011 with my Filipina family, and I just talked (Dec. to a representative at Social Security office who told me I do not qualified because I did not live in the USA for 5 continuous years prior to turning 65. That was a surprise! Staying overseas for an extended period of time has risk. I say it's best to be in country when you become eligible to not have any complications. Now, I'm out of insurance and Medicare as my main carrier cuts you off at age 65.

Anonymous said...

I am a US citizen and have just turned 65. I am in India for last couple of years temporarily and will return to US in couple of years. I do not want to start receiving Soc Security payments till I am 67. Can I still enroll in Medicare and part B and D? If yes how can I do it from India. Since I am opting to not receive Soc. Security payments till I turn 67 Can I set up monthly payments of $93.50 through my bank In US. Thank you so much!

Elaine said...

1. Re 10%++ late enrollment penalty for those residing overseas and returning to the U.S. and signing up for Medicare, I think you are wrong.
As you will read in the SSA's Center for Medicare and Medicaid Services (CMS) Program Operations Manual System (POMS) HI 00805.266 titled “Description of Terms Used in the Special Enrollment Period and Premium Surcharge Rollback Provisions”(online at https://secure.ssa.gov/poms.nsf/lnx/0600805266) the Special Enrollment Period would be available to those covered under national health plans in foreign countries.
Please also note this SSA CMS POMS document seems to say that those self-employed would also be eligible for the Special Enrollment Period; and, also defines that "current employment status" may include those who are not actively working.

2. Re above Comment (cut-and-pasted below) you do say benefits for those "Medicare benefits are available only if you live in the US."
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Anonymous said...
You are giving out erroneous information. It is NOT true that a US citizen living abroad is not ELIGIBLE for medicare. What is true is that you cannot USE your medicare coverage in hospitals outside the USA (with very limited exceptions in certain areas that do not apply to most expats). Many expats who live outside the USA return to the USA when they need to use medicare for a serious illness and they are entitled to do this.

October 23, 2011 at 7:42 PM
Nigel said...
Anon,
Please re-read the article. Nowhere does it say that US citizens living abroad are not eligible for Medicare.

October 24, 2011 at 6:24 AM

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Here are some specifics about Medicare for those who plan to live or travel outside the US:

•Medicare benefits are available ** only if you live in the US.** If you currently have Medicare and you move outside the US, medical expenses outside the US will not be covered by Medicare.

•If and when you return to the US, Medicare Part A will be available to you. ** For Part B coverage, you have the option to continue paying your monthly premium while living outside the US. Since Medicare benefits are only available inside the US, it is strange to have to continue to pay a monthly premium for a service not available to you. **

•If you drop your Part B coverage, then return to the US, you will be required to re-enroll ** and pay a premium that is 10% higher for each 12-month period that you did not have coverage. This is just as if you had declined coverage when it was first available to you.**

•If you are re-enrolling for Part B, you may only do so from January through March each year. Coverage will not resume until July of that year.

Anonymous said...

is it possible to have Medicare advantage or Medigap insurance in the States if you have a foreign address (Mexico for example)? I know I would have to travel to the US for treatment, but would these plans be available.

Anonymous said...

Those eligible for Medicare Coverage can apply for it online. However there is special situation in which on-line enrolment was not possible. I am a US citizen and eligible for Medicare coverage. I live in India. I will be turning 65 in three months and am allowed to enrol on line. However when I tried to enrol for Medicare ONLY (without also simultaneously applying for retirement benefit), the on-line attempt was terminates with an advice to call 1-800-772-1213 in the Medicare Administration, USA.
On further research, I am led to believe that even if you are eligible for Medicare coverage, you need to be in the USA to apply for coverage UNLESS you also opt to start retirement benefit payments. Note that by opting for early retirement benefit at age 65, you will get only about 93% of the benefit at full retirement age, 66 in my case.

Has anyone else run into the same situation?